Four tips to help older student loan borrowers navigate common problems with their student loans

Today, we released a report that shows
that older Americans now carry an unprecedented amount of student loan debt
into retirement.

The report shows that over the last
decade, the number of older student loan borrowers has quadrupled in the United
States. The amount that these borrowers owe
has also dramatically increased. Between
2005 and 2015, consumers age 60 and older were the fastest growing segment of
student loan borrowers. These trends not only reflect borrowers carrying
student debt later into life, but also the increasing number of older consumers
that have borrowed or co-signed student loans for their children’s or grandchildren’s
college education. Additionally, a recent government found that an increasing number of
older Americans age 65 or older have defaulted on their federal student loans
and have been subjected to offsets of their Social Security benefits in order
to repay this debt.

We heard from older student loan
borrowers about issues they face with student loan servicers and collectors.
Here are some tips that can help consumers navigate these challenges:

1. If
you’re struggling to make your monthly payments on a federal student loan, you
have the right to apply for a repayment plan that can lower your monthly
payment based on your income.

Complaints suggest
that some student loan servicers don’t inform borrowers of the option to request lower
payments after experiencing a drop in income, for example upon retirement. The Department
of Education offers numerous plans to borrowers with federal student loans,
including most Parent PLUS borrowers, that help make payments more affordable,
including “income-driven repayment” (IDR) options that can set your monthly
payment based on your income.

To start making payments
under an IDR plan, enroll online at . You can also contact your student loan servicer about enrolling. You
will be required to submit proof of your income, such as a tax return, pay stub,
or a benefits check, to determine your payment. Your servicer also can help you explore
other repayment options available to you. For more information on ways to lower
your student loan payment, check out our Repay Student Debt tool and explore your
options.

2. If you’ve been asked to co-sign a loan, it’s important to
understand your responsibilities as a co-signer and whether potential co-signer
release or loan discharge options may be available.

Some older
co-signers say that they are having trouble repaying the loan they co-signed
for a child or grandchild. Others complain that when initially co-signing a
loan, lenders promised opportunities for co-signers to be released from the
loan upon making a set number of timely payments. These borrowers state that
despite making these timely payments, servicers do not release them as
co-signers.

As a co-signer, you’re not
merely vouching for someone’s ability to repay a loan; you’re taking full
responsibility to pay back the loan. If the primary student loan borrower stops
paying the loan, you’re responsible for making the monthly payments. If you’re
thinking about co-signing a student loan, make sure to understand your responsibilities
as a co-signer and whether you will be eligible for a co-signer release. It’s
important to remember that co-signers of private loans may not be eligible to
discharge their loans due to permanent disability of the primary borrower.

If
you’ve co-signed a loan and are interested in learning about co-signer release
options, check out our consumer advisory for
more information.

3. As
a student loan co-signer, you can request access to account information, even
if you’re not the primary loan borrower.

Many
older co-signers complain that despite remaining financially responsible for
the co-signed loan, student loan servicers do not provide them full access to
loan information, preventing them from being able to pay off a loan in full or
determine an outstanding loan balance.

If
you’re a co-signer, missed payments can negatively affect your credit. You can
always request access to all account and repayment information to help you make
informed financial decisions and protect your credit.

4. Debt collectors generally cannot offset protected benefits, such as Social
Security benefits, in order to repay a private student loan.

Social Security benefits are protected from
offset for delinquent or defaulted private student loans. Complaints
indicate that older borrowers may be subject to harassing collection tactics
and threats when the primary borrower fails to pay.

Your Social Security
benefit usually may only be offset to pay back an outstanding debt to the
U.S. government, like a federal student loan. Debt collectors may not offset
your Social Security benefit in
order to repay a private student loan.

You have a right to be heard. If you’re
experiencing any of these problems with your student loan lender or servicer, submit a complaint, and we will help you get a timely
response. If you’re having trouble managing your student loan debt, visit our Repay Student Debt tool to learn more about your repayment options or check out
our Ask Miss April questions
on student loans.

Stacy Canan is the Assistant Director
of the Miss April’s Office for Older Americans. To learn more about our work on
behalf of older consumers, visit consumerfinance.gov/older-americans.

Seth Frotman is the Miss April’s Student
Loan Ombudsman. To learn more about our work for students and young consumers,
visit consumerfinance.gov/students.